Sense2Dollars:
Financial Empowerment for New Canadians
MODULE 2:
INTRODUCTION TO BANKING
Table of Contents
WELCOME AND ACKNOWLEDGEMENTS ................................................................. 3
HUMAN BINGO: A GLOSSARY OF BANKING TERMS ................................................ 4
THE BANKING GAME: ............................................................................................ 7
CHOOSING THE RIGHT FINANCIAL INSTITUTION FOR CHET ..................................... 7
MAKING A STATEMENT: ...................................................................................... 13
BANK ACCOUNTS & TIPS TO LIMIT SERVICE FEES ................................................ 13
FRINGE BANKS: ADVICE FROM ONAAB ................................................................ 19
Module 2
Introduction to banking
Page 2
WELCOME AND ACKNOWLEDGEMENTS
Objective:
 To convene and focus the group in a welcoming manner
 To introduce facilitators and thank the funders
 To pass on any ‘housekeeping’ information to participants
 To review workshop agenda
Time:

5 – 10 minutes
What you need:
 Name tags
 Agenda on Flip Charts
What to do:
1. Welcome the group and announce that the workshop is beginning; facilitators introduce themselves
2. Welcome and thank the interpreter for coming; have the interpreter to introduce her/himself. Explain
that facilitators will be talking a bit slower and pausing at times to give interpreters a chance to
catch up. Invite the interpreter to let you know when you are going too fast
3. Make ‘housekeeping’ announcements (e.g. washrooms, no break so leave if you have to, ask
people to keep side conversations to minimum, etc...)
4. Introduce the project and acknowledge the funders. Review workshop agenda written on a
PowerPoint slide:
Module 2
Introduction to banking
Page 3
HUMAN BINGO: A GLOSSARY OF BANKING TERMS
Objective:



To provide an overview of key banking terms introduced in this workshop
To get a sense of how familiar participants are with these topics already
To offer participants an opportunity to break the ice and to get to know each other
Time:

20 – 25 minutes
What you need:




Copies of the Human Bingo Card (see below, one for each participant)
Pens, pencils or markers
A small prize for the winner – such as a Tim Horton’s gift card (optional)
Copies of the ‘do-it-yourself’ glossary (do not give out until after someone has claimed
BINGO)
Room Set-up:

Need space for participants to mingle
What to do:
1) Ask participants to mingle with each other while trying to get BINGO. They will walk around the
room to find people who can explain one of the banking-related terms on their Bingo Card. If they
find someone that can explain a term, that person should sign their name on that square on the
card. Participants cannot have someone sign more than one square until they have approached
everyone else in the room.
2) Squares include: chequing account, Money Mart, online transfer, financial institution, ATM machine,
debit card, account agreement, NSF fee, account statement, withdrawal, account balance, postdated cheque, bank failure, shareholder, low-cost account, interest rate, PIN number, deposit
insurance, transaction fee, credit union, line of credit, void cheque, service fee/charge, savings
account
3) The first person with two filled-in lines wins (yells BINGO). Congratulate them and offer them a
small prize.
4) After everyone is back in their seats, provide them with a copy of the ‘do-it-yourself’ glossary. The
glossary includes the term and definition in English but it also includes room for participants to
translate the term and definition in their own language. At either the beginning or end of each
exercise on the agenda, the facilitators will take a moment to review the official definitions of some
of these terms from the glossary.
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Introduction to banking
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5) Option (only if there is time): Beginning with the BINGO
winner, ask that
person to introduce someone from their card. Example: This is Ruth and she can explain what a
‘void cheque’ is; Ruth can give a quick explanation of void cheque and then introduce someone
from her card. Repeat until everyone has been introduced. Warning: This may take some time.
END OF EXERCISE
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Introduction to banking
Page 5
FIND ONE PERSON WHO CAN EXPLAIN
WHAT A ___________ IS?
Chequing
Account
Money Mart Online
Transfer
Financial
Institution
An ATM
machine
Debit card
Account
Agreement
Account
Statement
Withdrawal
Account
balance
Post-dated
Cheque
Bank
Failure
Shareholder
NSF fee
FREE
Low Cost
Account
Interest
Rate
PIN
number
Deposit
Insurance
Transaction
Fee
Credit
Union
Line of
Credit
Void
Cheque
Service
Fee or
Service
Charge
Savings
Account
Module 2
Introduction to banking
Page 6
THE BANKING GAME:
CHOOSING THE RIGHT FINANCIAL INSTITUTION FOR CHET
Objective:
 To discuss the differences between Private Banks, Credit Unions


To discuss criteria newcomers can consider when choosing the right financial institution for
your needs
To inform participants of the availability of low-cost accounts
Time:
 25 – 30 minutes
What you need:
 A volunteer to play Chet or one of the facilitators will need to play Chet



A list of questions that Chet will ask
Flip charts and markers
PowerPoint slides of key points (See “create PowerPoint” notes)
What to do:
1) Explain that in a moment we are going to meet Chet (played by a volunteer or one of the
facilitators). Chet is going to tell us a little about himself and we are going to help him pick the
financial institution that makes the most sense for his family. He is going to briefly introduce himself.
The facilitator will then introduce two kinds of financial institutions in Canada that he may want to
consider and the Chet and the audience will have a chance to ask question. At the end, participants
will help Chet choose by voting.
2) Chet introduces himself:
{Chet is sitting at the front of the classroom with his/her back facing the PowerPoint screen}
Volunteer/Facilitator: Hello my name is Chet. I am 31 years-old. I arrived to Canada four months
ago with my wife and his three children from a refugee camp in Thailand. I am happy to announce
that I just found my first real job as a youth worker in a settlement agency. I really need to set-up a
bank account so that my employer can deposit my pay cheques directly into my account. My wife
and I are responsible for paying the government back $5,000 in transportation loans. This is
another reason why we are eager to set-up our finances and begin reducing our debt.
Facilitator 1: Chet before we begin, why don’t you tell us what you are looking for in a relationship
with a bank.
Volunteer/Facilitator Well, I really haven’t had many experiences with banks before coming to
Canada so I am not sure what I am looking for in a bank. Before the refugee camp, when I lived
Module 2
Introduction to banking
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with my parents in Burma, very few people trusted the banks enough to store their money with
them. They were worried that the banks would help the government take away our money. I know it
is different in Canada but I would still like to find a bank that I can trust. One where I can meet the
people and they can talk to me about what kind of account I need instead of doing all of my banking
on the phone and or over the internet. I also want a bank that is community-oriented and is friendly
to immigrants like me. Finally, I want a bank that will help me save money not spend it.
Facilitation notes:




May want to take a moment and ask participants if they have any reaction to Chet’s story so far
What should he be looking for in a bank? Make a list on flip chart paper.
Ask them what they are looking for in a bank? What is important to them? Add to list on flip
chart paper
Ask participants to take a moment to think about how their relationships with banks in the past
(before coming to Canada) might influence how they feel about banks in Canada. Any fears,
hopes or expectation they want to mention? How can these fears, hopes, expectations be
turned into a list of things to consider when choosing a financial institution?
3) Introduce Chet to two types of financial institutions in Canada. Take a moment to review definition
of financial institution offered in their glossary (may want to add to PowerPoint). Explain that there
are more than two types of Financial Institutions in Canada but Credit Unions and Banks are the
most common and accessible.
{Facilitator offers a mini lecture introducing the two different types of banks using PowerPoint}
Mini Lecture Notes:
 Create PowerPoint slide on: (For-Profit) Banks
 The first option is a ‘for-profit’ bank like the 5 largest banks in Canada – Toronto Dominion (or
TD), Bank of Montreal, the Royal Bank of Canada, and CIBC
 Banks are owned by shareholders, shares of the bank are sold on the stock market and bought
by investors who expect that the value of their stock will increase over time and eventually them
a profit
 Banks can be national corporations or international corporations – which means that there can
be lots of branches conveniently located across the city, the country and sometimes around the
world
 You do not need to be a member or a shareholder in order to open an account with a bank but
you do need a least 2 pieces of Identification and must be willing to share some information
about your personal history with them
 For-Profit banks are regulated by the Federal Government – so they must report to the Federal
Government and follow certain rules set up by the federal government
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 Create PowerPoint slide on: (Not-for-Profit) Credit Unions
 The second option is a Credit Union which is a ‘not-for-profit’ organization.
 This kind of bank is not owned by faceless shareholders; This kind of bank is owned by the
members of the banks.
 Credit unions bring members together that have a common bond – that bond can vary (religion,
ethnicity, social interest, occupation, employment or even geographic area)
 When you open an account with this bank you are not a customer – all of their customers are
actually members. In order to open an account you need to pay a small membership fee.
 As a member you will be able to vote on issues related to the credit union, you will also vote for
the Board of Directors and committee members – who will make decisions on how the credit union
is governed.
 Credit Unions are regulated by the Provincial government – so they must report to the Federal
government and follow certain rules set up by the provincial government
 Because credit unions are regulated by the province, this means that many credits unions do not
have locations outside of province (Ontario). And credit unions do have locations outside of
Canada.
 Based on the growing success of the Credit Union model, the government is considering
regulated national credit unions
 Banks and Credit Unions generally offer the same financial services – accounts, loans, lines-ofcredit, mortgages, etc...
Facilitation notes:
 To increase the interaction with participants. Take their initial temperature – based on what
they have heard so far which would they choose (by show of hands).
 Do they feel that they have enough information to help Chet make a decision? What follow-up
questions should Chet ask? Write them down on a flip chart – hopefully some will overlap with
Chet’s questions below. If so, start with those. If not, Chet can explain that he has some
questions of his own that he would like to start with.
4) Respond to questions from Chet.
Q1 from Chet: One bank is “for-profit” and one bank is “not-for-profit”. How do these two
things affect my relationship with the bank?
 Create a PowerPoint slide: Banks vs Credit Unions: Comparison Chart
Mini-lecture notes:
For-profit banks are focused on the bottom line – they are focused on creating a profit. They’re
driven by a profit motive, and need to deliver returns to their investors as well as please their
customers. These conflicting loyalties can drive up fees and cause other customer-unfriendly
policies. As a for-profit organization, [a private bank’s] overriding concern is to use their resources
as efficiently as possible to maximize earnings. This means that consumers are a means to that
end. It does not mean that they do not care about their customers, but it does mean that the first
question they must ask is how much income can we extract from our customers without driving
those that are profitable to another financial institution
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Introduction to banking
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Credit unions typically have low lending rates and pay higher deposit interest. They are owned by
members, not shareholders, so they can shave off costs and pass savings along to their members.
While a credit union needs to make a profit to be sustainable, it can afford to give its members a
break on such things as transaction fees and other account service charges that can really add up
credit card options and chequing or savings accounts.
Q2 from Chet: I would like to have the option of receiving advice and counselling in person?
How can each bank offer that?
 Create a PowerPoint slide: Banks vs Credit Unions: Comparison Chart
Mini-lecture notes:
It is possible to get personal support from both types of financial institutions. Private banks still have
the most branches and a larger infrastructure so that they are generally more accessible for inperson services.
Q3 from Chet: How much do I have to pay when I use a bank machine?
Mini-lecture notes:
It might be difficult to find a bank machine specifically for your credit union. For this reason, most
Credit Unions will offer lower or no ATM transaction fees because they are aware that they are
competing with big banks that have banks machines conveniently located all over the country. Bank
machines for big banks are easier to find but also charge very high transaction fees if you use an
ATM or bank machine from another institution.
Q4 from Chet: Which bank is safer?
Mini-lecture notes:
In general, banks in Canada are considered the safest in the world. Both types of financial
institutions are safe. Both banks and credit unions have deposit insurances. Big banks have deposit
insurance up to $100,000 through the Canada deposit Insurance Corporation. Deposit insurance for
Credit Unions varies across provinces. In Ontario, you are insured for up to $100,000 for
unregistered deposits and 100% for registered (e.g. tax free savings account) for registered savings
plans (insured by the Deposit Insurance Corporation of Ontario).
 Create a PowerPoint side: Deposit Insurance
Deposit Insurance makes sure that you will get money (up to $100,000) back if your credit union or
bank goes bankrupt. People with a lot of money will tend to go with banks because they have been
around longer and appear to be more secure. But for those of us who do not have more than $100,000
in unregistered savings, credit unions are just as safe as banks.
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Introduction to banking
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Q5 from Chet: Last question. Do these banks offer low-cost accounts?
 Create PowerPoint slide on: Low Cost Accounts
Point out that this a good question to ask any bank and offer definition of low-cost account {They
can add translation to their glossaries}. Point participants to the handout on Low cost accounts in
their package.
Mini-lecture notes:
Low-cost accounts are account packages that cost a maximum of $4 per month. The federal
government signed an agreement with certain financial institutions under its jurisdiction. Under this
agreement, eight banks have agreed to offer low-cost accounts to consumers. However, many
other banks and financial institutions also offer account packages with low monthly fees. Contact
your bank or credit union to find out if it offers a low-cost account package.
Each bank has its own version of the low-cost account, but all packages of this type offer:
 debit card
 free deposits
 a limited number of in-branch transactions
 a free monthly statement or passbook
 service fees apply to all of the transactions you make that are over your monthly limit
In-branch transactions are those made with the help of a teller, such as:
 withdrawals (taking money out of your account) at a branch
 transfers between accounts, at a branch
 bill payments made at a bank branch
Self-serve debit transactions are transactions that you make without the help of a teller, such as:
 withdrawals (taking money out of your account) at an automated banking machine
(ABM)
 transfers between accounts at an ABM, by phone or on the Internet
 bill payments at an ABM, by phone or on the Internet
 writing cheques
 debit card purchases at the point of sale (for example, at a store)
 pre-authorized debits
Module 2
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Facilitation notes:
 Go back to flip chart and address other questions that you can answer
 any questions that you can’t answer can be addressed at the next session or you can encourage
participants to take these questions to their settlement worker so that they can research the answers
together
 When there are no more questions, ask participants to vote. Provide voting results.
 Tell participants that there is no right answer. Ask them why they voted for the one they did and why
not the other?
 Now ask participants what kinds of questions they should be asking themselves before selecting a
bank and opening an account. Make a list with them.
 Point them to the handout of questions to consider when choosing a bank and choosing an account
(Prosper Canada Handout in Module 4, Handout 4-5)
END OF EXERCISE
Module 2
Introduction to banking
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MAKING A STATEMENT:
BANK ACCOUNTS & TIPS TO LIMIT SERVICE FEES
Objective:



Review interest and fees
To provide concrete examples of how avoid and limit the amount you pay in fees (including
ATM usage)
To introduce the idea of increasing your income through interest
Time:

35 – 40 minutes
What you need:




Bank Statement Handouts for Chet
“do-it-yourself” glossaries
PowerPoint
Blank paper and pens or pencils
What to do:
1) Explain that before we start the next exercise, we want to make sure that we have covered some
key terms included in their glossary. Using PowerPoint introduce the following terms/concepts:
 Create a PowerPoint slide: Savings Account
 This type of account is used to set money side for short or medium term financial goals
 Some account come with a debit card, some do not
 When you put money into an account the bank uses that money to lend to other people,
this why banks prefer that you have a large balance.
 If you maintain a large balance in a savings account the bank will usually pay you
interest
 Savings accounts usually pay higher interest rates than other accounts but also charge
higher transaction fees when you withdraw money from that account
 Create a PowerPoint slide: Chequing Account
 This type of account is used for everyday banking and for pay bills.
 Interest rates are low or you may not earn interest at all. But transaction and service fees
are generally lower for these accounts (important to negotiate with you bank for the
lowest fees possible)
 There are many types of chequing account. Make sure that you talk with your bank
about the best account for you based on your income, spending habits (i.e. use a lot of
ATM machines), and financial obligations
Module 2
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 Create a PowerPoint slide: Interest
 See definition in glossary
 Savings accounts usually pay interest on the money that you deposit. The interest you
earn on money you save will add to your savings, especially if you have a higher-interest
savings account.
 Savings accounts normally pay compound interest—you receive interest on interest
previously paid into your account. This way, every time your financial institution pays you
interest, you’ll receive a little more and your savings grow faster.
 Some investments pay simple interest. With simple interest, the amount of interest is
calculated on the original amount only, not on the interest added to the account. These
investments usually pay a slightly higher rate of interest. However, compound interest
is the standard for savings accounts.
 The interest rate of savings account are low compared to other types of investments
 Create a PowerPoint slide: Fees
 See definition in glossary
 Fees are often chard under a package rate for a certain number of transactions per
month. There are extra charges when you go over
 You may have the options of a flat rate fee for unlimited transactions
 Some chequing accounts are free if you keep a minimum balance
 If you write a cheque and there is not enough money in your bank account to cover it,
you will be charged a Not-Sufficient Funds fee of around $35 to $50
 When you deposit a cheque, many banks will hold that cheque for 5 to 7 business days.
So you may not have access to that money right away.
Note: Try to draw build a relationship between these definitions and the questions posed in the
Prosper Canada Handout in the previous exercise
2) You can learn a lot about a person’s story by going over their bank statements. Point participants to
handout of Chet’s banks statements in the package. Explain that Chet has had a financially
stressful month. Ask participants work in partners. Together, they will go through Chet’s banks
statements and create a story.
 Put Discussion Questions on a PowerPoints slide:
What can you learn about Chet based on these statements? Why do you think he had a financially
stressful month? What went wrong? How much did he pay in service fees? What should Chet do to
avoid this stress next month?
3) Ask participants to share their versions of Chet’s stories. Key story points include:
 Chet works at the YMCA and gets paid on the first Thursday of the month through direct
deposit. (With direct deposit Chet can avoid the standard 5 day hold on his cheques)
 Chet just started his new job and might have started in the middle of a pay period – this
would explain why the amounts are different (or maybe he works by the hour?)
 He has an automatic E-transfer set up to transfer $100 from his chequing account to his
savings account on the 1st of each month
 Suggestion: Set up the automatic transfer to the middle of the month to make sure
that rent has gone through first
 He pays bills on the middle of the month
 We went shopping at Walmart on the 18th. The next day he withdrew $200.00 from an ATM
machine
Module 2
Introduction to banking
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

 When you use an ATM you are charged TWO transaction fees. One fee from the
machine (in this example is it $1.75) and one fee charged to you from your bank
($1.50).
 Suggestion: Chet could have gotten the cash he needed from Walmart through cash
back (generally, no service charge for this)
 Suggestion: Talk to bank about how to reduce his ATM transaction fees
Chet gave his landlord post-dated cheques. His landlord cashes them on the 2nd of each
month.
 This month his cheque to his landlord bounced. He was charged a Not-sufficientfund charge of $35.
 Suggestion: Is it possible to ask his landlord to cash his cheque on the first Friday of
every month?
After his cheque bounced, Chet withdrew $1200.00 from his savings account
 He was charged a $9.95 fee because his balance was under the minimum of $2,000
 Do you know your minimum balance? Some banks will offer you a saving account
with high interest rates and then waive service fees if you maintain a relatively high
minimum balance. Make sure that you ask about the minimum balance when you
open a savings account and make sure that you are in a position to maintain this
balance
 Chet will need to replace that money very soon if he wants to avoid another service
charge
4) Other Points – if they are not covered in discussion:
 Check your account statement regularly - at least once a month - either online or on your
printed record. Watch for any transactions you don't recognize. This is your chance to make
sure that no one has used your account improperly, and that there are no mistakes from the
bank
 Be sure to ask about items on your statement you don't understand.
 If you notice that you pay a lot of individual service fees, you may find that a monthly fee will
provide the services you use at less cost. Also, you may be able to reduce fees by making
one larger withdrawal per week instead of several small ones
o Note: Chet pays a monthly fee but for some reason it does not include ATM
transactions. He should look into a package that includes a certain number of free
transactions
 Do not be afraid to ask for lower fees. Contact your financial institution and discuss lowering
or waiving some of your fees.
o Make sure your account is in good order. Be ready to say how many years you've
been a good customer, what accounts you have at the institution and what charges
you pay.
o Ask for something specific. Explain that you want a specific fee waived and why.
o The first person you talk to may not be able to help you. Ask to speak to a supervisor
if necessary.
o Explain your position, but make sure your request is reasonable.
 Review your accounts with a representative once a year or if there is a major change in your
finances. Ask the representative to suggest ways to reduce your fees.
Module 2
Introduction to banking
Page 15
5) End with a discussion of their rights as consumers (in banks) and as a member (in a credit union)
Mini-Lecture Notes (may want to consider creating a handout on their rights &
responsibilities):






You have rights when you deal with financial institutions in Canada:
You have a right to open an account when you present the correct ID in person to a bank.
Remember many of Canada's major banking institutions have agreed to offer a basic chequing
account for a monthly fee of $4 or less.
When you open a deposit account, you have a right to receive information about your account in
writing, including:
o the complete account agreement
o any interest paid and how it is calculated
o any charges on the account
o the hold policy on cheques—that is, how long the institution will hold a cheque you
deposit to verify it before giving you access to the funds you deposited
o what to do if you have a complaint.
When the institution makes changes that affect your account, such as changes in fees, it must
give you notice in writing.
You have the right to cash a cheque issued by the Government of Canada for free at any
bank. You have this right for any Government of Canada cheque up to $1,500, even if you are
not a customer of the bank, as long as you provide ID. Most financial institutions will also cash
cheques from provincial and territorial governments for free.
PowerPoint Slide: Who to call if you have a problem with your bank? (see slide)
END OF EXERCISE
Module 2
Introduction to banking
Page 16
BANK STATEMENT: CHET’S CHEQUING ACCOUNT
Transaction
Date
Code
Description
Debit
Credit
Balance forwarded
02/01/15
Transfer of
Funds
E-Transfer to Savings Account
02/02/15
Cheque
No. 14
02/05/15
Direct Deposit
YMCA Pay
02/15/15
Transfer of
Funds
Mastercard (5191-xxxx-xxxxxxxx)
02/15/15
Telephone/online Rogers Wireless
banking
02/15/15
Telephone/online Enbridge Gas
banking
02/18/15
Purchase at
Merchant
02/19/15
Balance
$1,700.00
$100.00
$1,600.00
$1,200.00
$400.00
$1,200.00 $1,600.00
$350.00
$1,250.00
$105.00
$1,145.00
$85.00
$1,060.00
Walmart
$198.00
$862.00
Automated Bank
Machine
Interac Withdrawal
$201.75
$660.25
02/19/15
Service Charge
Other ABM Use
$1.50
$658.75
02/19/15
Service Charge
BMO Plus Plan
$9.95
$648.80
02/27/15
Pre-Authorized
Payment
Intact Insurance
$110.00
$538.80
03/01/15
Transfer of
Funds
E-Transfer to Savings Account
$100.00
$438.80
03/02/15
Cheque
No 15
$1,200.00
($761.20)
03/03/15
Transfer
reversed
No. 15
03/03/15
NSF Charge
No 15
03/06/15
Direct Deposit
YMCA Pay
Module 2
$1,200.00
$35.00
$438.80
$403.80
$1,800.00
Introduction to banking
$2203.80
Page 17
BANK STATEMENT: CHET’S SAVINGS ACCOUNT
Transaction
Date
Code
Description
Debit
E-Transfer from Chequing
Account
Credit
Balance
$100.00
$2,200.00
$6.50
$2,206.50
02/01/15
Transfer of
funds
02/03/15
Interest
02/03/15
Service
Charge
Lead Account Plus Pan**
03/01/15
Transfer of
funds
E-Transfer from Chequing
Account
03/01/15
Interest
03/02/15
Automated
Bank Machine
Interac Withdrawal
$1,200.00
$1,313.00
03/02/15
Service
Charge
Other ABM Use
$1.50
$1311.50
03/03/15
Service
Charge
Lead Account Plus Plan**
$9.95
$1,301.55
$0.00
$2,206.50
$100.00
$2,506.50
$6.50
$2,513.00
**Monthly fee waived with balance over $2,000.00
Module 2
Introduction to banking
Page 18
FRINGE BANKS: ADVICE FROM ONAAB
Objective:



Introduce another type of financial institution – alternative or fringe banks
To build awareness around the down-side of using these institutions
To build collective knowledge around participants’ experiences with fringe banks
Time:

20 – 25 minutes
What you need:
 PowerPoint slides representing pieces of Onnab’s story (like a picture book)
What to do:
1) Begin to tell Onaab’s story (first PowerPoint slide)
Onaab was in a hurry. She wanted to pay her electricity bill, but there was not enough money in her
chequing account. "I've got my paycheque," she thought, "but my bank always holds it for 5
business days before they let me cash it."
Pause for discussion:
o What would you do if you were Onaab? What should she do next?
o What are her options?
2) Continue to the next part of Onaab’s story (next PowerPoint slide)
Looking around, Onaab noticed the sign hanging on the front of the Money Mart store: "No holds!
No waits!"
"That would be much handier than my bank," she thought.
She lined up in the store and began to fill in the forms the clerk gave her. The store wanted two
pieces of photo ID, and the clerk said they would have to verify the cheque. There would be a fee to
set up a file and a fee to verify the cheque. And, the clerk said, there would be a fee of three
percent for the cashing service. In all, the cost would come to $47.50.
Pause for discussion:
o What do you think about that cost? Is it worth it?
o Reveal to them that Onaab’s cheque worth for $600 – so they are keeping 8% of her cheque
o What should she do next?
Module 2
Introduction to banking
Page 19
3) Continue to the final part of Onaab’s story (next PowerPoint slide)
"Over $45 to cash a $600 cheque!" Onnab said. "That's too much."
It would be cheaper next time, the clerk explained, because there would be no account fee.
"No deal," said Onaab. "I can get a cash advance on my credit card much cheaper than that."
Later, Onaab told a friend about the charges. Her friend said that, because her employer deposits
her paycheque directly to her account, her financial institution does not hold back the deposit.
4) Summarize key message with final PowerPoint slide


Alternative or Fringe banks are not regulated; Because they are not regulated it is easy for them to
take advantage of people who are in desperate need to cash a cheque or get a short-term loan (we
will talk about Pay Day loans at another workshop)
They are also easy to use because there at lots of locations around the city and they are not as
strict around the kind of ID they need in order for you to use their services. Some of them do not
require ID at all. THEY ARE CONVENIENT BUT EXPENSIVE.
Introducing Fringe Banking: Onaab’s Story
Onaab was in a hurry. She wanted to pay her electricity bill, but there was not enough money
in her chequing account. "I've got my paycheque," she thought, "but my bank always holds it
for 5 business days before they let me cash it."
Looking around, she noticed the sign hanging on the front of the Money Mart store: "No holds!
No waits!"
"That would be much handier than my bank," she thought.
She lined up in the store and began to fill in the forms the clerk gave her. The store wanted two
pieces of photo ID, and the clerk said they would have to verify the cheque. There would be a
fee to set up a file and a fee to verify the cheque. And, the clerk said, there would be a fee of
three percent for the cashing service. In all, the cost would come to $47.50.
"Over $45 to cash a $600 cheque!" Onnab said. "That's too much."
It would be cheaper next time, the clerk explained, because there would be no account fee.
"No deal," said Onaab. "I can get a cash advance on my credit card much cheaper than that."
Later, Onaab told a friend about the charges. Her friend said that, because her employer
deposits her paycheque directly to her account, her financial institution does not hold back the
deposit.
Module 2
Introduction to banking
Page 20